Hard pan is a major cause of land degradation that affects agricultural productivity in developing countries. However, relatively little is known about the interaction of land degradation and hardpans. The objective of this study was, therefore, to investigate soil degradation and the formation of hardpans in crop/livestock mixed rainfed agriculture systems and to assess how changes in soil properties are related to the conversion of land from forest to agriculture. Two watersheds (Anjeni and Debre Mewi) were selected in the humid Ethiopian highlands. For both watersheds, 0-45 cm soil penetration resistance (SPR, n = 180) and soil physical properties (particle size, SOM, pH, base ions, CEC, silica content, bulk density and moisture content) were determined at 15 cm depth increments for three land uses: cultivated, pasture and forest. SPR of agricultural fields was significantly greater than that of forest lands. Dense layers with a critical SPR threshold of ≥ 2000 kPa were observed in the cultivated and pasture lands starting at a depth of 15-30 cm but did not occur in the undisturbed forest land. Compared with the original forest soils, agricultural fields were: lower in organic matter, CEC, and exchangeable base cations; more acidic; had a higher bulk density and more fine particles (clay and silt); and contained less soluble silica. Overall, our findings suggest that soil physical and chemical properties in agricultural lands deteriorated, causing disintegration of soil aggregates resulting in greater sediment concentration in infiltration water that clogged up macro-pores, thereby disconnecting deep flow paths found in original forest soils.